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Cracks Are Finally Appearing In French Market

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I have 3 alerts running on seloger (the French equivalent to Rightmove) within 10km of three target towns where we are hunting. Rhone-Alpes region so highly linked to Brit market once you move out of town centres.

This week I have been getting 2-3 price cuts per day arriving in my inbox. Having tracked these since early Spring this is the first time I have seen anything like this. The odd drop previously, lots of stuff relisted at same price and also listed with increasing numbers of agents. All went quiet over summer hols - as they were all banking on French and Brit holidaymakers coming to the rescue - as more of these white knights start heading for home their resolve is cracking.

The number of new builds on offer is just increasing all the time - a long hard winter ahead for some developers if they don't start smelling the coffee.

From a purely personal note we made a low offer on a place in the spring and the vendor barely budged. The agent warned us that post Sarkozy the market would leave us behind. I suggested this was highly unlikely and time would tell.

So far time is telling - waiting for them to come back to reopen negotiations, then will just have to remind them at the time of offer I had said our offer was based on the current market and took no view of future movement - so our previous offer will just have to be discounted in line with the market movement - dangerous game: chasing the market down :lol:

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The agent warned us that post Sarkozy the market would leave us behind.

Sarko made a pledge before his election that he would introdue a MIRAS-style law for homeowners, if elected.

He tried to implement this 2 weeks ago and the law was chucked out by the Senate as being unlawful. Main problem was that he wanted to backdate it to inlcude all those who had bought in the last 5 yrs. The Senate say he can only offer it to houses bought after his election. Tres bien !

The French market has all but stalled. Apart from the speculators , no-one is buying. If the French economy doesn't meet it 2.5% growth target this year (and this is now VERY unlikely), then there will be less tax cuts, etc and the economy will not be stimulated. Remember also, the French prefer to save at times like this - just the opposite to what the govt. wants (ie. for us all to spend more).

I'm holding out for a 30-40% correction, like the one in the early 90's. Then, real prices fell by 40% in some areas. And I bought my house :lol:

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Sarko made a pledge before his election that he would introdue a MIRAS-style law for homeowners, if elected.

He tried to implement this 2 weeks ago and the law was chucked out by the Senate as being unlawful. Main problem was that he wanted to backdate it to inlcude all those who had bought in the last 5 yrs. The Senate say he can only offer it to houses bought after his election. Tres bien !

Ouch - I thought Sarko wouldn't find it plain sailing to push the change through - didn't realise he'd hit a brick wall already :lol:

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i was offered a french property a few months ago for just 11,000 euros and yes it looked little better than a cow shed but came with more land than your average UK luxuary des res but it was smack in the middle of france so it would be a long drive for me and i don't like the french so i gave it a pass.

With prices like that for a roof over your head i can not see it dropping much can you.

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i was offered a french property a few months ago for just 11,000 euros and yes it looked little better than a cow shed but came with more land than your average UK luxuary des res but it was smack in the middle of france so it would be a long drive for me and i don't like the french so i gave it a pass.

With prices like that for a roof over your head i can not see it dropping much can you.

Regions like Rhone-Alpes are not in that league - looking at 300k Euros for 200 sq m of house in need of renovation and a few acres of land - great by UK standards - but compare that to your example and you will see the differential - move into the heart of the Alps and 300k will only get you a 2 bed apartment - hence France was recently rated the most overpriced market in the world Fitch rating in FT

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Guest The_Oldie
i was offered a french property a few months ago for just 11,000 euros and yes it looked little better than a cow shed but came with more land than your average UK luxuary des res but it was smack in the middle of france so it would be a long drive for me and i don't like the french so i gave it a pass.

With prices like that for a roof over your head i can not see it dropping much can you.

Perhaps not on a 11,000 euro property, but France has a lot of housing that is considerably more expensive than that. I'm looking in the 250,000 to 300,000 euro region (present asking prices) and am expecting to see falls of 30% ish.

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Regions like Rhone-Alpes are not in that league - looking at 300k Euros for 200 sq m of house in need of renovation and a few acres of land - great by UK standards - but compare that to your example and you will see the differential - move into the heart of the Alps and 300k will only get you a 2 bed apartment - hence France was recently rated the most overpriced market in the world Fitch rating in FT

I don't get this. Of course we all want prices to be as low as poss - everbody should have a home without having to struggle financially to get it. But there is surely a radical difference between France and the UK. In France it's hotspots (and Paris, of course). In the UK it's systemic. Its EVERYWHERE.

(edit: By the way, 200 sq meters by UK standards is very big!)

Edited by cynic

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Perhaps not on a 11,000 euro property, but France has a lot of housing that is considerably more expensive than that. I'm looking in the 250,000 to 300,000 euro region (present asking prices) and am expecting to see falls of 30% ish.

You could well see it in that price range.

Houses in Paris were cheaper in the year 2000 than they were in 1992 but i don't know where they stand today.

You could aways wait for the UK prices to go bang and then you could well get 50% dicount just like they are getting now in parts of the USA.

have you checked out the nederlands ! People are nice and most speak english and has a high standard of living but income taxes are sky high.

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Guest The_Oldie
You could well see it in that price range.

Houses in Paris were cheaper in the year 2000 than they were in 1992 but i don't know where they stand today.

You could aways wait for the UK prices to go bang and then you could well get 50% dicount just like they are getting now in parts of the USA.

have you checked out the nederlands ! People are nice and most speak english and has a high standard of living but income taxes are sky high.

I'm certainly not buying anything at the moment, just looking. The plan is to buy a place in France as a main residence for our forthcoming retirement and a smaller place in England as a UK base and for the kids to use if they need it.

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I have 3 alerts running on seloger (the French equivalent to Rightmove) within 10km of three target towns where we are hunting. Rhone-Alpes region so highly linked to Brit market once you move out of town centres.

The number of new builds on offer is just increasing all the time - a long hard winter ahead for some developers if they don't start smelling the coffee.

I wouldn't get too excited just yet. The French market is often around 12 months behind the UK market and remember that the French fix interest rates for the term of the mortgage and are also harder to lay off in a recession.

Last year Grenoble (in the Rhone Alpes) did about 8% and some hotspots like the Brittany coast made 50%! The Miras scheme, which is irrelevant to non residents, will probably keep the market going for a little time yet. The scenario I see is a recession in the UK forcing Brit leasebackers and 2nd homers to sell up in France and a correction of 25 to 40% would make a lot of sense. Already many British leasbackers are feeling the pain with the bankruptcy of Transmontagne

http://pistehors.com/news/ski/comments/074...agne-goes-bust/

I honestly can't see the market progressing any further as there is good supply in many areas and people just can't raise the money. France is ridiculously dear, my shoebox house cost me 400K - more than back in blighty. However there isn't a subprime type problem as such in France as banks are quite stringent with things like deposit requirements, remortgaging doesn't happen either.

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France is ridiculously dear, my shoebox house cost me 400K - more than back in blighty.

I'm puzzled. This must be a very hot hotspot.

Is that 400k sterling or euros? When you say "more than back in blighty", whereabouts in blighty do you mean? And where (roughly, or very roughly if your shy about it) in France?

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I'm puzzled. This must be a very hot hotspot.

Is that 400k sterling or euros? When you say "more than back in blighty", whereabouts in blighty do you mean? And where (roughly, or very roughly if your shy about it) in France?

no not shy, Grenoble, ridiculously expensive town...

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no not shy, Grenoble, ridiculously expensive town...

Fair enough. But, on the basis of Grenoble, it would be a tad absurd to cite 'France' as expensive.

I'm thinking of the 80% (guesstimate) of France that is not expensive but still very habitable...

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The plain fact is that rents simply do not support capital values in France any more than they do in the UK.

Look at this small chateaux for rent at £1294 per month:

http://www.primelocation.com/international.../agmt999000219/

Alternatively, if you prefer a slightly larger chateau with about 40 hectares. There is a dovecote, a farm, several other houses and another abandoned chateaux also available if you like to throw big theme parties and it is only a short plane ride away from the UK at £3,350 per month!

http://www.primelocation.com/international.../CHAX999000122/

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well i will report back to you all as i'm off touring around france is a few days time in my motorhome.

anyone know of any good camp sites just below Paris or cutting across towards luxenburg

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Ouch - I thought Sarko wouldn't find it plain sailing to push the change through - didn't realise he'd hit a brick wall already :lol:

Its france we're talking about, if they don't like a new law they simply burn things and riot.

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Guest grumpy-old-man
Perhaps not on a 11,000 euro property, but France has a lot of housing that is considerably more expensive than that. I'm looking in the 250,000 to 300,000 euro region (present asking prices) and am expecting to see falls of 30% ish.

Hi oldie,

I am on holiday in Brittany at the moment & called in to one of the local French Immobiliers (estate agents) & had a chat.

We used them to rent our French home out & they are/were very good.

She has confirmed to me that they are very, very quiet & she expects prices to drop. However it looks like the same has happened here as in the UK, asking prices have gone up & not much selling.

just my usual anecdotal man_in_the_street_said_stuff. ;)

also, hello to everyone, really missing hpc. I have managed to get an internet connection to use, I am back next week from my holiday & if my adsl has been connected in my new rented house, speak to you all soon. :)

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Fair enough. But, on the basis of Grenoble, it would be a tad absurd to cite 'France' as expensive.

All the towns with some economic life are expensive, particuarly in comparison to wages. I don't have a link but a recent survey which someone linked to in another thread cited France as the most unaffordable housing market relative to wages in the Western world.

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All the towns with some economic life are expensive, particuarly in comparison to wages. I don't have a link but a recent survey which someone linked to in another thread cited France as the most unaffordable housing market relative to wages in the Western world.

Well my flabber is well and truly ghasted!

Pity you don't have the link. What is the average wage in France? And the average house price?

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I don't get this. Of course we all want prices to be as low as poss - everbody should have a home without having to struggle financially to get it. But there is surely a radical difference between France and the UK. In France it's hotspots (and Paris, of course). In the UK it's systemic. Its EVERYWHERE.

(edit: By the way, 200 sq meters by UK standards is very big!)

Three points to my post:

  • This part of France closely linked to UK market - possible lead indicator as people offload second homes

  • Other members also looking at French market - so sharing my info

  • I have a personal interest - so feedback from this site really useful

I would suggest the difference is not radical, but is marked, France is vast and the amount of derelict property visible on any drive suggests that we could arm all frustrated FTBs in the UK with a DIY kit and house them in return for regenerating the housing stock.

However a national picture is not that much difference when you look at trends over time French stats - scroll down for charts that show average prices over years rather than the quarterly one at the top.

Finally - true 75 sq m would make a fairly typical 3 bed house in UK - so 200 is a lot of space.

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Well my flabber is well and truly ghasted!

Pity you don't have the link. What is the average wage in France? And the average house price?

Most likely to be Fitch ratings report - you can't read their reports for free, press covers it though e.g. FT

"Fitch finds that houses are most overvalued in France, where prices are furthest above their long-run trend, and especially high relative to household incomes. Prices are high relative to rents in New Zealand and the UK."

Not sure of the actual numbers - see chart 3 for comparison of house price to disposable income across France, US and UK

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Most likely to be Fitch ratings report - you can't read their reports for free, press covers it though e.g. FT

"Fitch finds that houses are most overvalued in France, where prices are furthest above their long-run trend, and especially high relative to household incomes. Prices are high relative to rents in New Zealand and the UK."

Not sure of the actual numbers - see chart 3 for comparison of house price to disposable income across France, US and UK

Thanks for the link. Figure 3's wage/price curve actually shows there's nought but a hair's difference between the UK and France ratios if you average out the 2 red curves. In fact if you look at the level of the last trough to the current peak, the UK has travelled further and a trend line of ratios for the 2 countries would suggest the UK market is slightly more distorted than that of France. Anyway, such problems as you have there, I've no doubt they've been exacerbated by MEWing brits bidding up prices in nice areas. I commiserate.

(goonboy! I couldn't figure out the 'exam by friday' paradox so I cheated and googled an explanation - interesting. Too difficult for me.)

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(goonboy! I couldn't figure out the 'exam by friday' paradox so I cheated and googled an explanation - interesting. Too difficult for me.)

It's a nice little thought problem!

I reckon Timms' analysis of the teacher being a bit thick is probably the most astute explaination :)

goonboy reckon's it's the same class of problem as the missing dollar, expressing something mathematical in "human" language leads to impreciseness and many interpretations...

Thanks for taking the time to think about it!

goonboy is fed up of puzzles for this week, so here's a link with the best story of the day instead

http://news.bbc.co.uk/2/hi/africa/6959209.stm

Monkeys :)

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Guest The_Oldie
Hi oldie,

I am on holiday in Brittany at the moment & called in to one of the local French Immobiliers (estate agents) & had a chat.

We used them to rent our French home out & they are/were very good.

She has confirmed to me that they are very, very quiet & she expects prices to drop. However it looks like the same has happened here as in the UK, asking prices have gone up & not much selling.

just my usual anecdotal man_in_the_street_said_stuff. ;)

also, hello to everyone, really missing hpc. I have managed to get an internet connection to use, I am back next week from my holiday & if my adsl has been connected in my new rented house, speak to you all soon. :)

Hi GoM,

We were out in St Malo a couple of weeks ago and did the rounds of the immobiliers. Everything looked much the same as it did when we were last out there, same properties, same prices. We popped into one where we had made an offer on an apartment with an asking price of 230,000 euros.

Oldie: Good morning, we made an offer on an apartment earlier this year but have heard nothing from you.

Immobilier: (Thumbing through file) Ah yes, Mr Oldie, you offered 150,000 euros and I'm afraid it was rejected, but if you would like to try it again it may be different now, particularly as you are cash buyers.

Oldie: Hmmm, we'll have a think about it and if we're still interested will come back tomorrow. However, if we do make another offer, it will certainly be lower. If you don't hear from us this week, we may be back in contact later this year or early next year.

After another look around, we decided to leave it for now, although we did notice the same apartment on with another immobilier at 200,000 euros, the gap is closing ;).

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